Govt cash to entice new apprentices

This is the first time the Government will pay apprentices and their employers directly. Photo / NZ Herald

The Government has taken a dramatic step to entice more people into apprenticeships by offering a bonus of up to $2000 to the first 10,000 people to sign on as apprentices after April 1.

The one-off bonus, which Employment Minister Steven Joyce said was unlikely to be repeated, is the first time a New Zealand Government has ever paid apprentices directly.

There will also be a matching one-off bonus of $2000 for construction trades, or $1000 for other apprentices, paid to employers for every apprentice they take on. This is the first time the Government has paid employers directly to take on apprentices since wage subsidies for apprentices on block courses were abolished in 1991.

Building and Construction Industry Training Organisation head Ruma Karaitiana said it was "a bold move" that could "substantially accelerate" a recovery in industry training after a sharp drop across all industries from 133,000 trainees before the recession to 83,400 at last count.

Without the move, he said it would have taken three years to get training back up to pre-recession levels. "This may substantially accelerate that process, but this is the first time the Government has ever paid apprentices directly so we really have no way of knowing what the effect will be."

He said the $2000 would cover the full $1470 first-year training fee for a carpentry apprentice and leave $530 over towards the cost of tools and safety equipment, which cost about $2000 for apprentices who start with nothing.

Mr Joyce said the bonuses, which will cost $28 million, would bring new apprenticeships on sooner to help the Christchurch rebuild. They came in a package, unveiled by Prime Minister John Key, which will also boost ongoing funding for industry training by $19.5 million a year.

"Modern apprenticeships", which were restricted to young people aged 16 to 21, will be replaced by "New Zealand apprenticeships" which will be open to all age groups from January 1 next year. A common funding rate for training organisations of $5200 per standard trainee measure (typically 120 credits) will replace the mix of $2919 per standard trainee measure plus $1777 or $1956 a year for modern apprenticeship coordinators.

Mr Joyce said the net result would average about 12 per cent less funding for apprentices aged 16 to 21, but about 70 per cent more for older apprentices.